1. What is a dynamic energy contract?
The main difference with a standard energy contract is that gas and electricity rates are different every day. Electricity also has a different rate every hour. The price the consumer pays is directly determined by the price on the gas and electricity exchanges.
Prices will be announced one day in advance. Then you know how much one kWh of electricity per hour costs you the next day. The price of gas changes only once a day.
2. Why would you want it?
The advantage of tariffs that move exactly in line with market prices is that in a sense you are paying a very fair price. This is particularly useful if energy prices are structurally low.
Is the price falling on the market? Then pay less for your energy consumption now. This is in contrast to fixed price contracts, which also include variable contracts, which are now adjusted once a month. Furthermore, energy suppliers where prices are fixed for a longer period of time always charge a little extra to cover themselves against the price increase. This is not necessary with dynamic speed.
3. What is the danger?
However, this extreme flexibility also has a drawback. As a consumer, especially now that prices can vary enormously per day, you simply don’t know where you are. On a bad day, your costs can literally skyrocket by euros per cubic meter or kWh.
4. How much does it cost?
It’s hard to say, because it changes every day. Look at the averages of the last few months that are published on the joint place among dynamic fare providers, a switch looks quite tempting.
For example, the average gas price in October is “only” 1.37 euros. In May it was even 1.06 euros. But you shouldn’t focus on those rates, because government taxes aren’t included in them. As a result, you already need to add at least 60 cents to one cubic meter of gas.
So in October you end up with one or two euros for a cubic meter of gas. With large suppliers you are usually more expensive with a variable contract. But most days in September the rate was considerably higher, paying more than 2.60 euros per cubic meter including government taxes and some days even more than 3 euros. In the last week of August it was even one euro more.
If you have that kind of days or weeks in between during the winter, the bill quickly gets incredibly high.
As electricity rates fluctuate much more, they are even more difficult to compare. At peak times, the main price is regularly paid, sometimes 70 to 80 cents per kWh. At night and in broad daylight, the rates are often very low.
5. Who is it interesting for?
People who consume a lot of electricity and who manage to consume time well are particularly good candidates for a dynamic tariff. For example, people with an electric car. They use a lot of electricity to charge the car, but they can, if they try their best, program this so they pay little. Often the best time to do this is at night.
Yet even that is an uncertain existence. If there is a strong wind, a lot of low-cost energy is generated and the dynamic speeds are therefore very low at times when little energy is used. But if there is no wind and the power stations still run (partly) on gas, the prices are “just” very high.
Ultimately, a dynamic contract is primarily for people who want to address their energy consumption every day, says Joyce Donat of the Consumers’ Association. And it’s only for families who can suffer from being very expensive for a month at times.
